Fifth Third Bancorp (NASDAQ: FITB) and Patriot National Bancorp (NASDAQ:PNBK) are both finance companies, but which is the better business? We will compare the two businesses based on the strength of their dividends, earnings, valuation, analyst recommendations, profitability, institutional ownership and risk.

Institutional & Insider Ownership

83.8% of Fifth Third Bancorp shares are owned by institutional investors. Comparatively, 2.5% of Patriot National Bancorp shares are owned by institutional investors. 0.4% of Fifth Third Bancorp shares are owned by company insiders. Comparatively, 78.6% of Patriot National Bancorp shares are owned by company insiders. Strong institutional ownership is an indication that endowments, hedge funds and large money managers believe a stock is poised for long-term growth.

Dividends

Fifth Third Bancorp pays an annual dividend of $0.64 per share and has a dividend yield of 2.1%. Patriot National Bancorp pays an annual dividend of $0.04 per share and has a dividend yield of 0.2%. Fifth Third Bancorp pays out 24.0% of its earnings in the form of a dividend. Patriot National Bancorp pays out 3.4% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years.

Risk and Volatility

Fifth Third Bancorp has a beta of 1.35, suggesting that its stock price is 35% more volatile than the S&P 500. Comparatively, Patriot National Bancorp has a beta of 0.21, suggesting that its stock price is 79% less volatile than the S&P 500.

Earnings & Valuation

This table compares Fifth Third Bancorp and Patriot National Bancorp’s gross revenue, earnings per share and valuation.

Gross Revenue Price/Sales Ratio Net Income Earnings Per Share Price/Earnings Ratio
Fifth Third Bancorp $6.89 billion 3.12 $1.56 billion $2.67 11.43
Patriot National Bancorp $26.96 million 2.60 $1.93 million $1.18 15.20

Fifth Third Bancorp has higher revenue and earnings than Patriot National Bancorp. Fifth Third Bancorp is trading at a lower price-to-earnings ratio than Patriot National Bancorp, indicating that it is currently the more affordable of the two stocks.

Profitability

This table compares Fifth Third Bancorp and Patriot National Bancorp’s net margins, return on equity and return on assets.

Net Margins Return on Equity Return on Assets
Fifth Third Bancorp 25.81% 9.58% 1.02%
Patriot National Bancorp 14.33% 7.10% 0.59%

Analyst Ratings

This is a breakdown of current ratings and price targets for Fifth Third Bancorp and Patriot National Bancorp, as provided by MarketBeat.com.

Sell Ratings Hold Ratings Buy Ratings Strong Buy Ratings Rating Score
Fifth Third Bancorp 3 17 2 0 1.95
Patriot National Bancorp 0 0 0 0 N/A

Fifth Third Bancorp currently has a consensus target price of $28.64, indicating a potential downside of 6.13%. Given Fifth Third Bancorp’s higher probable upside, equities analysts clearly believe Fifth Third Bancorp is more favorable than Patriot National Bancorp.

Summary

Fifth Third Bancorp beats Patriot National Bancorp on 13 of the 15 factors compared between the two stocks.

About Fifth Third Bancorp

Fifth Third Bancorp is a bank holding company and a financial holding company. The Company conducts its principal lending, deposit gathering, transaction processing and service advisory activities through its banking and non-banking subsidiaries from banking centers located throughout the Midwestern and Southeastern regions of the United States. It operates through four segments: Commercial Banking, Branch Banking, Consumer Lending, and Wealth and Asset Management. It diversifies its loan and lease portfolio by offering a range of loan and lease products with various payment terms and rate structures. It offers commercial and industrial loans, commercial mortgage loans, commercial construction loans, commercial leases, residential mortgage loans, home equity, automobile loans, credit card, and other consumer loans and leases. It offers various types of deposits, such as demand deposits, interest checking deposits, savings deposits, money market deposits and transaction deposits.

About Patriot National Bancorp

Patriot National Bancorp, Inc. is a one-bank holding company for Patriot Bank, N.A. (the Bank), a national banking association. The Bank offers consumer and commercial deposit accounts, such as checking, interest-bearing negotiable order of withdrawal (NOW) account, money market, time certificates of deposit, savings, Certificate of Deposit Account Registry Service (CDARS), individual retirement accounts (IRAs) and health savings accounts (HSAs). The Bank’s other services include automated clearing house (ACH) transfers, lockbox, Internet banking, bill paying, remote deposit capture, debit cards, money orders, traveler’s checks and automated teller machines (ATMs). The Bank offers commercial real estate loans, commercial business loans and various consumer loans to individuals, small and medium-sized businesses, and professionals. Its commercial and industrial loan portfolio consists of commercial business loans and lines of credit to businesses and professionals.

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